Mike Novogratz “had a fever.”
And “the only prescription was more crytpo!”
Way back on December 22, 2017, when Bitcoin crashed out of the clear blue sky to below $11,000, Mike said this on Twitter:
Looks to me like a short term top is in. My hunch is we consolidate between 10-16k for a while. Extreme would be 8k. Bull market isn’t over. Just pausing.
That same day, the market learned that Mike had recently changed his mind about launching his Galaxy Digital Assets Fund.
“I didn’t want to have to deal with the schizophrenic emotional side of it,” Novogratz told Bloomberg, adding that “there are just so many conflicts in that business. It was going to be more complicated than I wanted.”
After Bitcoin rebounded, Mike would go on to tweet this pseudo-retraction:
To be clear, we delayed launching a hedge fund with outside investors capital last week because we didn’t like market conditions for new investors. In no way does it mean we are less bullish the crypto markets.
Right. Because again: Mike Novogratz “had a fever.” And “the only prescription was more crytpo!”
So do you know what Mike did? Mike decided to start a merchant bank dedicated to cryptocurrencies and “blockchain-based ventures.” His plan was to take it public. To wit, from a Bloomberg piece published in January:
The former macro manager laid out a series of transactions in a statement Tuesday that would, if successful, raise $200 million and, through a holding company, list shares of his Galaxy Digital LP on Canada’s TSX Venture Exchange. He said Galaxy is building a “best-in-class, full service, institutional-quality merchant banking business in the cryptocurrency and blockchain space” and will be active in four areas: trading, principal investing, asset management and advisory work.
How that was any less “complicated” than the fund he shelved was anyone’s guess.
According to Mike’s “plan”, he would buy a Canadian crypto startup called First Coin Capital Corp., conduct a reverse merger with a Canadian shell company called Bradmer Pharmaceuticals Inc., and then once those two were rolled up, rename the combined entity “Galaxy Digital Holdings” on the way to raising $200 million in a private placement.
Bradmer Galaxy Digital Holdings, would be listed on the TSX and would have a stake in Mike’s crypto merchant bank.
I have absolutely no idea how all of that played out on a granular level and I absolutely do not care, because now that Bitcoin and the rest of the crypto space are rapidly converging on their intrinsic value of zero, all that matters is the end result.
That result: Galaxy Digital Holdings LP’s trading operation racked up a truly impressive $41 million loss in Q3, bringing total losses for the nine months ended September 30 to a “galactic” $136 million.
As you might imagine given the above, Galaxy Digital’s shares are not doing well. In fact, they’re sitting a record low.
As for The Bloomberg Galaxy Crypto Index (a dubious partnership between Galaxy Digital and Bloomberg), it’s had a rough go of it, managing just 16 weekly gains since February in the course of collapsing roughly 83% from the highs.
The bottom line: Mike “had a fever”.
And what he thought was the “prescription” is now killing him.